Have you thought about your estate?
This column was originally published in the Whakatane Beacon and is available online at the Eastern Bay App website.
Many people are quite surprised to learn they have an “estate.” We often associate the term “estate” with wealth, but legally, it simply means that if you own property or assets, no matter the value, you have an estate. And when you pass away, someone will need to manage that estate.
Estate Administration involves carrying out a person’s wishes as stated in their Will. This month, we’ll talk about how this process works and how to make it easier for your loved ones.
What happens to your estate when you pass away?
If you have a Will, the person you’ve chosen as the “Executor” is responsible for managing your estate after you pass away. The Executor is often a partner, spouse, close relative, or a trusted professional like a lawyer or accountant.
What does an Executor do?
Arranges the funeral (if it hasn’t already been done)
Manages the estate’s assets and property
Settles debts, taxes, and expenses
Distributes the estate to beneficiaries named in the Will
To carry out these duties, the Executor needs to apply to the High Court for “Probate”, which gives them the legal authority to manage the estate. Applying for probate involves preparing legal documents, and either your own lawyer or the lawyer of the person who has passed away can assist with this. However, if the total value of the estate is under $15,000, probate is usually not required - your lawyer can advise on this.
What if there’s no Will?
If there is no Will, or one can’t be found, the person is deemed to have died “intestate” and the High Court will appoint an Administrator. This is usually the person who stands to inherit the most from the estate, like a partner, spouse, or children. The Administrator then applies for “Letters of Administration,” which gives them similar legal authority to Probate.
Without a Will, the process can become lengthy and stressful, leading to additional costs, uncertainty, and potential conflicts about your wishes. This is why making a Will is not only about your final wishes – it’s an important way to care for your family when you are no longer here.
Finding the Will
The original Will is usually kept by the deceased person’s lawyer, but it might be stored with other important documents like birth certificates or passports. If you are unsure who the deceased’s lawyer is, your own lawyer can help track down the law firm that holds the Will (if one exists). To avoid any confusion or delays, it’s important to make sure your family knows where your Will is located and that it’s easy for them to access when needed.
When can an estate be distributed?
Generally, an estate can be distributed six months after Probate or a Letter of Administration is granted. There can be exceptions to this timeframe – such as providing for the immediate needs of young children. However, if a claim is made against the estate, distribution will be delayed until the claim is resolved, which can be very distressing for whānau.
It’s important to create a Will with a legal team that understands your personal situation. A well-prepared Will takes into account all your legal obligations, and is more likely to withstand challenges. It helps ensure your wishes are followed, and makes things easier for your family – at a time when they need it most.
